gift

Breakingviews – Samsung enjoys Washington gift that keeps giving

Reuters
Reuters

HONG KONG(Reuters Breakingviews) – Samsung Electronics can have Huawei’s cake and eat it too. The South Korean conglomerate expects to deliver a robust third-quarter performance, as U.S. sanctions forced its Chinese customer to stockpile chips. Taking some of its telecommunications equipment and smartphone business will be the real prize.

Operating profit in the three months to September will reach $10.6 billion, a two-year high, according to preliminary earnings guidance Samsung delivered on Thursday. Rebounding handset sales probably helped, but the company’s cash-cow semiconductor division probably got a big boost from Huawei. It had quickly been buying components ahead of restrictions recently imposed by Washington that bar the Shenzhen-based company from buying semiconductors made with American technology without a license.

   

That means the windfall is likely to be a one-off. The next step will be taking a slice of Huawei’s market share. It dominates in telecom

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